Invigorating Competition in Social Networking : An Interoperability Remedy that Addresses Data Network Effects and Privacy Concerns

The persistent dominance of Facebook has led many scholars and policymakers to generateproposals to invigorate competition in social networking. In this piece we address a remedy thathas received renewed attention: interoperability. Prior proposals of interoperability have focusedon eroding entry barriers that exist due to user-based network effects. We focus here ondata-generated network effects: the more data Facebook acquires from its users, the more its AIalgorithms can learn and improve the content Facebook provides its users. Without access to arich stream of user data, a social network is merely a static interface, with limited capacity toserve engaging or personalized content. As such, we propose a version of interoperability thataddresses both user and data-driven network effects. In doing so, we also explicitly tackle theprivacy issues that invariably arise whenever data is shared across firms